If real GDP falls by 1 percent,but the nominal GDP rises by 5 percent,then we must conclude that
A)the price level rises by 5 percent.
B)the price level falls by 1 percent.
C)the price level rises by 6 percent.
D)the price level falls by 4 percent.

Question

Quizplus · Accepted Answer

The nominal GDP increase of 5% combined with a real GDP decrease of 1% implies that the price level must have risen by approximately 6% to account for the difference.

If Real GDP Falls by 1 Percent,but the Nominal GDP